Penwest, of Paterson, NY, has a shareholders' meeting coming up: on June 22.
Penwest is best known for a proprietary drug-delivery technology.
The dissident slate has made the following case: The company's most valuable asset is the revenue stream on Opana ER that it receives from Endo, a licensee. The value of that single revenue stream has exceeded the net cap of the company for most of the last year. This indicates, to the dissidents, that company is acting as a drag on value. The dissidents would significantly reduce "headcount and other overhead expenses, which we believe continue to be maintained at levels that are in excess of what is required. Following the Annual Meeting, if our Nominees are elected, we intend to conduct a rapid, detailed review of the Company’s current employee base with the view towards eliminating all positions that are not funded by ongoing drug delivery collaborations or not necessary for the Company’s new operating plan."
How has the company responded? Its materials note that in an earlier proxy fight, Tang and Edelman (the former of Tang Cap, the latter of Perceptive Life Sciences) had a far more drastic proposal: they demanded a winddown of the company. So the incumbents think it a moral victory that Tang-Edelman no longer make that demand. Still, it is wrongheaded (they add) to demand headcount reduction.
"Don't reward this disruption of the progress we are making."
Showing posts with label Penwest Pharmaceuticals. Show all posts
Showing posts with label Penwest Pharmaceuticals. Show all posts
Monday, June 7, 2010
Sunday, May 23, 2010
Penwest Pharmaceuticals
Tang Capital Management LP and Perceptive Life Sciences Master Fund Ltd. have put forward their nominees for election to the board of Penwest Pharmaceuticals Co. (Nasdaq: PPCO), at the annual meeting scheduled for June 22, in Danbury, CT. Here are five more-or-less relevant facts in the backdrop of that election.
1. The dissidents' nominees are: Roderick Wong, Said Zarrabian, and John G. Lemkey.
2. Tang and Perceptive Life Sciences together control approximately 41.3% of the common stock outstanding. They charge that the Company's "most valuable asset is the royalty stream on Opana ER that it receives from licensee Endo Pharmaceuticals," and that "the net present value of this income stream alone has exceeded the market capitalization of the Comnpany for most of the past year and that this disparity has existed primariuly because the Company is spending the cash flow generated by this income stream on activities that we believe will not generate a positive return on investment."
3. What is Opana ER? It is a pain killer that apparently occupies much the same market space as Oxycontin. Opana ER "contains oxymorphone, which is a morphine-like opoid agonist against a Schedule II controlled substance, with an abuse liability similar to other opoid analgesics." I got that off the webpage of the licensee Endo Pharmaceuticals, which is headquartered in Chadds Ford, PA.
4. Penwest and Endo recently settled a lawsuit they had filed against an Israeli company, Teva Pharmaceutical. The terms of the settlement will allow Teva to begin selling a generic version of Opana ER beginning September 15, 2012.
5. The board of Penwest already includes two members who were put their by the efforts of these same two groups -- Tang and Perceptive Life -- at last year's meeting. I wrote about that here. The three new nominees, plus those two incumbents, would constitute a majority.
1. The dissidents' nominees are: Roderick Wong, Said Zarrabian, and John G. Lemkey.
2. Tang and Perceptive Life Sciences together control approximately 41.3% of the common stock outstanding. They charge that the Company's "most valuable asset is the royalty stream on Opana ER that it receives from licensee Endo Pharmaceuticals," and that "the net present value of this income stream alone has exceeded the market capitalization of the Comnpany for most of the past year and that this disparity has existed primariuly because the Company is spending the cash flow generated by this income stream on activities that we believe will not generate a positive return on investment."
3. What is Opana ER? It is a pain killer that apparently occupies much the same market space as Oxycontin. Opana ER "contains oxymorphone, which is a morphine-like opoid agonist against a Schedule II controlled substance, with an abuse liability similar to other opoid analgesics." I got that off the webpage of the licensee Endo Pharmaceuticals, which is headquartered in Chadds Ford, PA.
4. Penwest and Endo recently settled a lawsuit they had filed against an Israeli company, Teva Pharmaceutical. The terms of the settlement will allow Teva to begin selling a generic version of Opana ER beginning September 15, 2012.
5. The board of Penwest already includes two members who were put their by the efforts of these same two groups -- Tang and Perceptive Life -- at last year's meeting. I wrote about that here. The three new nominees, plus those two incumbents, would constitute a majority.
Wednesday, June 10, 2009
Three brief items
1. Tang Capital v. Penwest
Tang Capital and Perceptive Life Sciences are waging a proxy contest vis-a-vis Penwest Pharmaceuticals Co. (NASDAQ: PPCO), asking shareholders to vote for a resolution "requesting that the Board promptly take all necessary action to wind down substantially all of the Company’s operations so that the full value of
the Opana ER royalty income stream will be retained for the benefit of shareholders."
Opana ER is a pain treatment licensed in the US since June 2006 and marketed under the name Endo. The dissidents apparently think that the rest of the company is a drag upon that one valuable asset. The matter will be resolved at the annual meeting today.
As it happens, just yesterday PenWest licensed Endo to Valeant Phamaceuticals, for 10-20% of the net sales in Australia, Canada, and New Zealand.
Penwest's management is predictably resisting the call for dissolution.
2. Keweenaw Land Association Ltd.
Keweenaw is asking its shgareholders to vote for the company slate against dissident board candidates Ronald S. Gutstein and Scott Frisoli at their annual shareholder meeting, scheduled for June 23. This meeting is to take place in Ironwood, Michigan.
(I love Ironwood as a place name: a compound of two solid Anglo-Saxon nouns. But let's stay focused.)
Gutstein and Frisoli will bring little to the board, the company says, because, "Though undoubtedly possessing skills in the securities industry, they lack executive level experience in an industrial company and industry-specific experience in timberlands and minerals management, a fact acknowledged by RiskMetrics in its 2008 report.
"Neither individual has visited the Company, toured the Company's timberland holdings, or had in-depth on-site discussions with senior managers."
3. Chrysler-Fiat obstruction removed
I had hopes, briefly, that we were about to see a classic instance of judicial defiance of the executive. But it was not to be.
Ruth Bader Ginsburg had up the Chrysler-Fiat deal for about 24 hours.
Not exactly like the Steel-nationalization case from the Truman era, was it?
Dang.
Tang Capital and Perceptive Life Sciences are waging a proxy contest vis-a-vis Penwest Pharmaceuticals Co. (NASDAQ: PPCO), asking shareholders to vote for a resolution "requesting that the Board promptly take all necessary action to wind down substantially all of the Company’s operations so that the full value of
the Opana ER royalty income stream will be retained for the benefit of shareholders."
Opana ER is a pain treatment licensed in the US since June 2006 and marketed under the name Endo. The dissidents apparently think that the rest of the company is a drag upon that one valuable asset. The matter will be resolved at the annual meeting today.
As it happens, just yesterday PenWest licensed Endo to Valeant Phamaceuticals, for 10-20% of the net sales in Australia, Canada, and New Zealand.
Penwest's management is predictably resisting the call for dissolution.
2. Keweenaw Land Association Ltd.
Keweenaw is asking its shgareholders to vote for the company slate against dissident board candidates Ronald S. Gutstein and Scott Frisoli at their annual shareholder meeting, scheduled for June 23. This meeting is to take place in Ironwood, Michigan.
(I love Ironwood as a place name: a compound of two solid Anglo-Saxon nouns. But let's stay focused.)
Gutstein and Frisoli will bring little to the board, the company says, because, "Though undoubtedly possessing skills in the securities industry, they lack executive level experience in an industrial company and industry-specific experience in timberlands and minerals management, a fact acknowledged by RiskMetrics in its 2008 report.
"Neither individual has visited the Company, toured the Company's timberland holdings, or had in-depth on-site discussions with senior managers."
3. Chrysler-Fiat obstruction removed
I had hopes, briefly, that we were about to see a classic instance of judicial defiance of the executive. But it was not to be.
Ruth Bader Ginsburg had up the Chrysler-Fiat deal for about 24 hours.
Not exactly like the Steel-nationalization case from the Truman era, was it?
Dang.
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